PRACTICAL PROBLEMS

New Zealand Herald, Volume LXXIII, Issue 22421, 18 May 1936, Page 8

PRACTICAL PROBLEMS

An indication by timber merchants that, because of recent industrial legislation, prices would be subject to alteration which means, of course, increase—without notice, has roused the Government to prompt action. The timber merchants, and any others thinking of acting similarly, will be called upon to prove to the satisfaction of the Government that increased prices are justified. If they cannot do this, they will be restrained from raising their charges. The procedure is consistent with what has been suggested before. The Government has accepted an oversight over prices as a responsibility going with its policy of raising wages and conditions of labour. This, the first example of the policy in operation, points to the administrative problems which it is bound to bring into being. Industry is to be called upon to prove its case before increasing prices. In principle that may seem fair enough. True, when costs increase, the move to pass them on to the consumer is natural. The Government's anxiety is to see there shall be no exploitation of the public by any industry in this process. But all is not so simple as it appears on the surface. Suppose an industry fails to prove its case to the satisfaction of the Government, yet stands its ground, insisting that it cannot continue operating with the old scale of charges and new costs; here there appears to be deadlock. If that is the outcome, which side must give way? The big battalions are on the side of the Government, but it will need to bo careful about using them. It may unintentionally do an industry serious harm by imposing its will too drastically. The determination of such points as the equity or inequity of increasing prices is really a judicial decision. The Government is not a judicial body. There is the core of the problem.